Playbooks Supplements

Unconventional Yearbook 2018

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Page 100 of 107 | January 2018 | 99 PRODUCTION FORECAST | 2018 UNCONVENTIONAL YEARBOOK the Stack, overpressured, liquids-rich Meramec and Woodford tend to have highest production rates. Hence, most attention in the Stack con- tinues to center on the Meramec and Woodford formations where top performing wells can post breakeven economics well below $50/bbl, assum- ing a 10% return to investors. Operators continue to report higher production associated with lon- ger laterals and larger fracture jobs. Earlier this year, Devon Energy reported a 10,000-ft lateral in the overpressured Upper Meramec that produced a peak 24-hour IP of 6 Mboe/d with a 50% oil mix and potential for multizone development across separate intervals. In the Scoop, Woodford pros- pects remain a top priority. Highly prospective opportunities may be relatively limited geograph- ically in the Midcontinent; hence, Stratas will be monitoring developments closely. In the Rockies, the Niobrara reigns supreme among shales and tight rock resources. Most Niobrara activity remains entrenched in the Wat- tenberg area where Anadarko Corp. and Noble Energy are the most active operators. Economics in large portions of the Niobrara are advantaged due to mineral fee aspects of the acreage dating back to the transcontinental railroad. Outside Wattenberg, the prospects look brightest in the Powder River Basin. The Bakken Moving to the Bakken, the play is the most mature unconventional liquids play in North America. As such, development in the sweet spots is dense in many areas. That said, good opportunities remain in the gassier portions of the play along the Mis- souri River, east of the Nessen Anticline. Top wells in this part of the play can still generate breakeven prices well below $50/bbl. How long until the Bak- ken goes into steady decline hinges on the loss of its depletion drive. Expanding gas used to evacuate oil will continue to lose energy as reservoir pressure decreases and GOR increases. Geologically, the Devonian Bakken is composed of black, organic-rich shale and quartz-rich lime- stone and siltstone. The Upper Bakken generally has very low matrix permeability, and is less productive than the lower unit, but it does produce where over- pressured and naturally fractured. For this reason, we believe the Bakken will reach resource location exhaustion in the early- to -mid-2020s. Modeling Lower 48 natural gas production Turning to natural gas, Stratas projects uncon- ventional gas production will average 65 Bcf/d in 2018, an increase of 9 Bcf/d, or 16%, versus 2017. This outlook is largely based on two key resources: associated gas and the Marcellus Shale. Before pro- Lower 48 Unconventional Liquids Production Estimate 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 Jan-10 Aug-10 Mar-11 Oct-11 May-12 Dec-12 Jul-13 Feb-14 Sep-14 Apr-15 Nov-15 Jun-16 Jan-17 Aug-17 Mar-18 Oct-18 May-19 Dec-19 Jul-20 Feb-21 Sep-21 Apr-22 Nov-22 Jun-23 Jan-24 Aug-24 Mar-25 Oct-25 May-26 Dec-26 Jul-27 Feb-28 Sep-28 Apr-29 Nov-29 Jun-30 Daily Production (Mbbl) Permian Eagle Ford Midcontinent Rockies Bakken Appalachia Other

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